home sales

New Home Sales Rise 1.3%, Home Prices Down

The Commerce Department announced Monday that sales edged up 1.3% to a seasonally adjusted 307,000 unit annual rate, which was the fastest pace in five months, still below analysts’ expectations. The supply of new homes in the market would last 6.3 months at the current pace of sales. The median sales price of new houses sold in October 2011 was $212,300; the average sales price was $242,300. The seasonally adjusted estimate of new houses for sale at the end of October was $162,000.

The report suggests housing continues to drag on the U.S. economy and is a long way from recovering.

While new homes sales represent a fraction of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to the National Association of Home Builders. Many Americans believe it is just too risky to buy a home right now so soon after the housing bubble burst from four years ago.

While home prices have fallen, unemployment at over 9% has taken its toll on consumers. Many consumers who wish to buy a home simply cannot due to higher down payments and loan qualifications they cannot meet.

Mortgage rates continue to hover at historic lows. Refinancing has been a boon for mortgage companies, but that does nothing to address the glut of houses for sale on the market. Also, with the number of foreclosures and short sales on the market, consumers are more apt to purchase one of those vice a new home.

Sales of previously owned homes rose slightly last month to a seasonally adjusted annual rate of 4.97 million units, the National Association of Realtors said last week. That’s below the 6 million that economists say is consistent with sales in a healthy market and barely ahead of last year’s totals, which were the fewest since 1997.

New Home sales data for November 2011 will be released on Friday December 23, 1011 at 10:00 am ET.

Stocks Waver as Home Sales Fell in June

The markets are struggling to move this morning as home sales fell in the month of June. With the drop in home sales this years sales pace is on track to be the worst since the housing bust, leading to the weakest sales in 13 years. That’s not the only news keeping the markets down this morning. The European Union has proposed some new bank rules that will force banks to raise 460 billion euros by the year 2019. These measures are to help avoid future economic let downs. Amid all of the ups and downs in the markets Oil has continued to rise reaching $98.50 per barrel as crude stockpiles decreased by 3.7 million barrels. Gasoline supplies rose by 800,000 barrels after analyst expected a 450,000 drop. Despite the sluggish feel to the market several stocks have been performing well.

Apple Inc. (Nasdaq:AAPL) shares have made a nice jump this morning climbing 4% to 388.89 per share with an intraday high of $396.27. Apple made such a large jump on news that That third quarter revenue climbed 82% to $28.57 billion besting analyst estimates of 24.99 billion. AAPL posted a net income $7.31 billion of $7.79 per share while analyst expected a net income of $5.85 per share. Apple sold 20.34 million iPhones during the recently ended quarter to become the worlds largest seller of smartphones.

E*Trade Financial Corporation (Nasdaq:ETFC) shares are up this morning climbing 15% to $14.89 per share with an intraday high of $15.23 per share. Volume is trading five times normal on news that the companies largest share holder Citadel LLC, has asked the company to consider putting itself up for sale. E*Trade has a current market value of nearly $4.2 billion and could draw interest from a number of suitors if a buyout becomes possible.

Nalco Holding Company (NYSE:NLC) shares have risen 24% this morning to $35.90 per share. Volume has exceeded 28 million shares on news that Ecolab (NYSE:ECL) has agreed to purchase the NLC for $5.4 billion. Ecolabs offering $38.80 per share or .7 shares of Ecolab stock for each Nalco share. The bid is nearly 34% above the previous close for NLC. The Purchase of Nalco will help to diversify Ecolabs customer base and push the company into areas it has never been.

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